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House Faces Tricky Pre-Midterm Agenda, US Strikes Iranian Launchers · Balance of Power

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  Speaker 1: Bloomberg Audio Studios.
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  Speaker 4: News.
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  Speaker 5: Listen on demand wherever you get your podcasts or watch
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  Speaker 5: us live on YouTube.
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  Speaker 6: We look at the upward pressure on oil today. Both
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  Speaker 6: Brent and WTI, as Charlie mentioned, up the better part
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  Speaker 6: of three percent, once again, north of ninety dollars a
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  Speaker 6: barrel on Brent crude due to the skirmishes that once
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  Speaker 6: again have surfaced around the Strait of Hormuz. As we mentioned,
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  Speaker 6: the U.S. going after Iran, which the CENTCOM says was
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  Speaker 6: getting ready to lay mines in the Strait of Hormuz,
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  Speaker 6: Iran then retaliating against U.S.
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  Speaker 3: Forces.
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  Speaker 6: In Jordan, and President Trump now vowing that there will
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  Speaker 6: be a response to that. What form it takes remains
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  Speaker 6: an open question, as there are many open questions still,
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  Speaker 6: six months into this conflict, still with the president saying
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  Speaker 6: that the pursuit is the same, Iran not having a
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  Speaker 6: nuclear weapon, as he said recently on Fox News.
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  Speaker 7: I have numerous people said, well, did you have to
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  Speaker 7: do it? And then I say, do you think it's
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  Speaker 7: okay for Iran to have a nuclear weapon? A nuclear
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  Speaker 7: weapon is massive destruction. You know, take what you see
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  Speaker 7: and multiply it times 100. And everybody says no. I've
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  Speaker 7: had people on the other side asking me or debating me,
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  Speaker 7: let's say, on that question. Most people are absolutely fine
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  Speaker 7: with it. They were fine with Venezuela. They were all
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  Speaker 7: against Venezuela when I did it. And now look how
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  Speaker 7: that's turned out so great.
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  Speaker 8: We point our questions to Tyler Kendall, of course. Our
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  Speaker 8: Washington correspondent has been covering this along with everything that's
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  Speaker 8: been happening in Venezuela all ahead of our conversation with
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  Speaker 8: General Ben Hodges, who's standing by us.
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  Speaker 1: To share some wisdom with us here.
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  Speaker 8: Tyler, I know we're all asking the same questions, beginning
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  Speaker 8: with whether this is just the latest skirmish or the
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  Speaker 8: beginning or resumption of heavy military activity.
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  Speaker 9: Right.
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  Speaker 10: We've seen this cycle before, but this does come after
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  Speaker 10: a month of essentially kinetic action being paused. I will
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  Speaker 10: point out that within the last 30 minutes, we got
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  Speaker 10: new headlines from Iranian state media with the IRGC claiming
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  Speaker 10: to have downed a U.S. drone over the Strait of Hormuz.
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  Speaker 10: So it would appear that the tit-for-tat kinetic action is continuing.
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  Speaker 10: As you both outlined, this really came and started with
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  Speaker 10: CENTCOM confirming that they had targeted these Iranian rocket launchers
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  Speaker 10: that were going to lay mines in the Strait of
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  Speaker 10: Hormuz after just last week we heard from the Trump
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  Speaker 10: administration claiming that all the mines had been detonated and removed.
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  Speaker 10: And the president issued a warning saying that if there
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  Speaker 10: are any mine-laying boats or attempts to lay mines, then
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  Speaker 10: the U.S.
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  Speaker 1: Would target those assets.
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  Speaker 10: So this is a continuation of that, but it does
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  Speaker 10: mark a difference comparatively to the economic pressure that we
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  Speaker 10: saw the U.S. roll out last week. Though, as our
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  Speaker 10: reporting has indicated, at this point, we haven't seen too
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  Speaker 10: many trading partners of Iran take those steps to cut
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  Speaker 10: off financial lifelines. But according to the Treasury Secretary, we
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  Speaker 10: should expect some more sanctions later this week.
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  Speaker 6: And we'll see if we get any insight into that
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  Speaker 6: as the Treasury Secretary and the Fed Chair at the
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  Speaker 6: G20 finance ministers meeting in Asheville, North Carolina. Tyler, I'd
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  Speaker 6: like to ask you as well about Venezuela, because while
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  Speaker 6: what we're talking about in the Middle East has driven
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  Speaker 6: oil prices higher, the president might say they will come
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  Speaker 6: down soon because the U.S. is now going to be
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  Speaker 6: in control of 65 billion barrels worth of Venezuelan energy resources.
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  Speaker 6: How quickly will that realistically materialize? What don't we know
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  Speaker 6: about this plan?
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  Speaker 1: That is the big question.
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  Speaker 10: Considering that the backdrop of this deal is that Venezuela's
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  Speaker 10: oil industry hasn't been able to really ramp up in
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  Speaker 10: the months since Nicolas Maduro's ouster. Right now, data analyzed
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  Speaker 10: by Bloomberg shows that last month, Venezuela was able to
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  Speaker 10: produce about 1.1 million barrels per day, which is much
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  Speaker 10: below what their levels were like during the peak of
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  Speaker 10: their infrastructure being intact. Analysts have different sorts of estimates
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  Speaker 10: for how long it could take them to get back
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  Speaker 10: up to peak production, but it seems to be somewhere
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  Speaker 10: around a decade, though we'll have to see how much
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  Speaker 10: this surge in investment could help. This is, of course,
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  Speaker 10: an unprecedented deal. We still have A lot of questions here,
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  Speaker 10: but so far our reporting has indicated that the U.S.
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  Speaker 10: is set to take a stake in a private company
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  Speaker 10: that will then be given these 100-year leases for 17
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  Speaker 10: strategic oil fields with, as you mentioned, the potential for
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  Speaker 10: 65 billion barrels of known reserves. We're going to have
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  Speaker 10: to figure out more details exactly how this is structured,
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  Speaker 10: exactly what the U.S. is going to have in terms
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  Speaker 10: of an equity stake, in terms of how much oil
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  Speaker 10: the U.S.
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  Speaker 1: Will be able to purchase at cost.
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  Speaker 10: Joe and Kayleigh, that is a really critical part of
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  Speaker 10: this deal for the administration that says that oil will
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  Speaker 10: be used to... refill the Strategic Petroleum Reserve quickly. I
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  Speaker 10: mentioned that because this is being structured under the Pentagon
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  Speaker 10: for national security purposes, and that's going to be a
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  Speaker 10: key reason that you hear from the administration about the
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  Speaker 10: legality behind this deal.
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  Speaker 8: It's difficult to connect the dots between this deal and
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  Speaker 8: gas prices being lower, though, right? The refining bottleneck still exists,
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  Speaker 8: even if we are bringing a lot more crude. In fact,
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  Speaker 8: it would be more pronounced if we brought more crude
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  Speaker 8: from Venezuela, right?
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  Speaker 10: Plus, we know that it takes a long time for
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  Speaker 10: the oil to move through the system, be refined. There's
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  Speaker 10: always going to be that lag. Plus, a lot of
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  Speaker 10: independent gas station owners set their own prices for the
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  Speaker 10: prices that we pay at the pump, and they have
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  Speaker 10: to think about the margin and where they bought that supply.
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  Speaker 2: Right, yeah.
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  Speaker 10: Which has contributed to what has been pushback from the
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  Speaker 10: industry to President Trump's claims, including of alleged price gouging.
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  Speaker 10: As you both know, he's going to be meeting with
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  Speaker 10: some fuel executives tomorrow, where perhaps we could get a
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  Speaker 10: little bit more of a clearer picture on how the
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  Speaker 10: administration plans to tackle it.
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  Speaker 6: All right. Bloomberg Washington correspondent Tyler Kendall here with us
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  Speaker 6: in our Washington, D.C.
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  Speaker 10: Studio.
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  Speaker 6: Thank you so much. From Venezuela to the Middle East
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  Speaker 6: and back again. And it is what's happening around the
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  Speaker 6: Strait of Hormuz that we want to discuss further as
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  Speaker 6: we're joined now by General Ben Hodges, retired former commanding
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  Speaker 6: general of the U.S.
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  Speaker 10: Army.
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  Speaker 6: Europe and retired general. He led forces in both the
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  Speaker 6: Iraq war and the war in Afghanistan. He's back with
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  Speaker 6: us now on Bloomberg TV and radio. General Hodges, it's
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  Speaker 6: always great to have you here on Balance of Power.
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  Speaker 6: You've heard us talk about what happened this weekend, the U.S.
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  Speaker 6: going after Iranian forces that were apparently loading up rockets
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  Speaker 6: to remine the Strait of Hormuz. And I'm quoting the
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  Speaker 6: president directly here. Iran has no Navy, no Air Force,
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  Speaker 6: no currency, and is not paying their soldiers. How is
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  Speaker 6: it possible that they still have the capability to try
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  Speaker 6: to mine the Strait?
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  Speaker 3: Well, Kayleigh, right out of the gate, you have put
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  Speaker 3: your finger on one of the key problems. The reports
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  Speaker 3: that we get from the Pentagon and from the White
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  Speaker 3: House about what's going on are not very closely connected
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  Speaker 3: to the truth on the ground. The first thing I
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  Speaker 3: thought about when I heard about this was, okay, if
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  Speaker 3: we've destroyed all of their rocket launchers, then how do
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  Speaker 3: they get these two that are out there getting ready
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  Speaker 3: to put mines up? back into the strait. So clearly
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  Speaker 3: the IRGC, the Islamic Revolutionary Guards Corps, still has capabilities.
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  Speaker 3: We're not sure what all they have. No doubt a
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  Speaker 3: lot has been terribly damaged or destroyed. But for the
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  Speaker 3: purpose of disrupting flow through the strait, ships, captains, and
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  Speaker 3: insurance companies just have to be concerned about the risk.
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  Speaker 3: And that risk is obviously still there.
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  Speaker 1: It's good to see you, General.
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  Speaker 8: We saw a video last week that was put together
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  Speaker 8: by the CENTCOM Commander General Brad Cooper making clear and
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  Speaker 8: explaining how the Pentagon managed to demine the Strait. The
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  Speaker 8: President had made this announcement a couple of times on
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  Speaker 8: social media, but that video was thought to be a
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  Speaker 8: more credible presentation of what happened. Should we take him
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  Speaker 8: at his word now that ships can pass through the
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  Speaker 8: Strait without having to worry about mines?
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  Speaker 3: Well, I think that an important thing to remember is
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  Speaker 3: that mines can be replaced or what we would call
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  Speaker 3: reseed a minefield, whether it's at sea or on the land.
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  Speaker 3: No doubt what Admiral Cooper was showing was good analysis
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  Speaker 3: and factual. But you don't clear a minefield once and
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  Speaker 3: then you're good. The Iranians, obviously, as we saw here
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  Speaker 3: in this attack, are trying to put mines back out there.
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  Speaker 3: And that's the problem. So in order for Central Command
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  Speaker 3: and our Great Navy to continue... Keeping the straight clear,
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  Speaker 3: this will require nonstop surveillance, nonstop commitment of resources to
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  Speaker 3: do that every time they see any fine mines or
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  Speaker 3: sea mines being put back in there.
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  Speaker 6: So what breaks us out of that cycle, General? It
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  Speaker 6: had been a month since we saw the volleying of
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  Speaker 6: strikes back and forth like we've seen within the last
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  Speaker 6: 24 hours. It seemed like there was kind of just
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  Speaker 6: a status quo where there wasn't being forward progress toward
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  Speaker 6: long-term peace or a negotiated outcome, but there wasn't necessarily
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  Speaker 6: anything dragging us backwards either until perhaps now. Is this
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  Speaker 6: a step backward, or could this be an isolated skirmish
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  Speaker 6: and the status quo continue from here?
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  Speaker 3: I don't know. If it's like a new phase or
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  Speaker 3: if this is isolated, I am pretty sure, though, that
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  Speaker 3: the IRGC still has more launchers and mines and other
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  Speaker 3: weapons that are in varying levels of capability that are hidden.
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  Speaker 3: And so this will go on for quite some time
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  Speaker 3: as CENTCOM continues to look for these things. But of course,
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  Speaker 3: this is all happening inside a political context. And there's
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  Speaker 3: pressure on the U.S. government because of our own approaching
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  Speaker 3: midterm elections. And perhaps after November and after we know
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  Speaker 3: the results, then maybe the pressure will seem much less.
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  Speaker 3: I mean, the Iranians know about our elections as well.
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  Speaker 3: So I think that will be instructive to see how
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  Speaker 3: does the pressure feel today. after November. But also, there
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  Speaker 3: is a possibility that the Iranians' leverage could be dissipating
• 10:24
  Speaker 3: as the market finds other sources where they're not so
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  Speaker 3: dependent on the oil that was coming through the Strait.
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  Speaker 3: And that's beyond my field of expertise. But you do
• 10:38
  Speaker 3: get indicators every now and then that they're going to
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  Speaker 3: find another way to do this. And if that's the case,
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  Speaker 3: then perhaps Iran may have overplayed their hand.
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  Speaker 8: General, I want to ask you about what is inside
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  Speaker 8: the Secretary of Defense Orders book. The reporting by the
• 10:57
  Speaker 8: Washington Post says that several U.S. military leaders have advised
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  Speaker 8: Secretary Pete Hegseth that prolonging large-scale operations against Iran is unsustainable.
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  Speaker 1: They point to the.
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  Speaker 8: Secretary of Defense Orders book, where these warnings appeared. This
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  Speaker 8: book is produced twice monthly, outlining worldwide availability of U.S. warships, aircraft, personnel,
• 11:21
  Speaker 8: and weapons systems. They took issue with the orders by
• 11:28
  Speaker 8: the secretary to the point where this story generated a
• 11:32
  Speaker 8: response from Sean Parnell, Pete Hegseth's spokesman, who says publishing
• 11:36
  Speaker 8: highly classified assessments from the book is a crime. It
• 11:40
  Speaker 8: is a betrayal of the force and much of what
• 11:42
  Speaker 8: they're publishing is inaccurate. He says, of course, we demand
• 11:46
  Speaker 8: candid military advice, non-concurs, which would be this case, are standard.
• 11:51
  Speaker 8: Secretary sees them constantly. That is how you run a
• 11:54
  Speaker 8: real military.
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  Speaker 1: What's your reaction?
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  Speaker 3: Well, I was encouraged to see that so many of
• 12:02
  Speaker 3: the senior leaders currently in service were willing to push
• 12:08
  Speaker 3: back on the, in this case specifically, I think these
• 12:13
  Speaker 3: were extensions of air, land, and naval forces in the
• 12:17
  Speaker 3: theater beyond what had originally been planned and resourced. And
• 12:22
  Speaker 3: it is the duty of these senior officers to lay
• 12:25
  Speaker 3: out for the secretary the risks The cost and an
• 12:29
  Speaker 3: honest assessment of what they can and cannot do. And
• 12:32
  Speaker 3: then after that.
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  Speaker 8: How rare is a non-concur like this?
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  Speaker 3: Well, I.
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  Speaker 3: I would imagine that it happens a lot. What's rare
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  Speaker 3: is that I don't think that we would anticipate this.
• 12:47
  Speaker 3: This administration, let me say it this way, the secretary
• 12:51
  Speaker 3: has put a lot of pressure on senior leaders. And
• 12:55
  Speaker 3: so I was surprised, frankly, and heartened that so many
• 12:59
  Speaker 3: of them would be willing to not concur. But look,
• 13:03
  Speaker 3: all the services have a readiness assessment program or process.
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  Speaker 1: We've had it for years.
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  Speaker 3: But there is pressure. If you say, I can't do
• 13:13
  Speaker 3: this or I'm below what the standard is, you better
• 13:16
  Speaker 3: be correct. And you have to show that you've made
• 13:18
  Speaker 3: the best use of the resources that you have. So
• 13:21
  Speaker 3: I can imagine there's a lot of pressure, even in
• 13:23
  Speaker 3: a normal set of circumstances, on the admirals and the
• 13:26
  Speaker 3: generals involved. They better be right. I think it's clear
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  Speaker 3: that they are.
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  Speaker 6: Well, and it's one thing to consider the U.S. 's
• 13:35
  Speaker 6: own readiness and our own interests. It's another to consider
• 13:38
  Speaker 6: the capabilities one might have to come to the aid
• 13:40
  Speaker 6: of others or to provide military equipment and munitions to
• 13:44
  Speaker 6: a country like Ukraine. We saw last week the CIA
• 13:47
  Speaker 6: Director Radcliffe visiting Moscow with reports that he was sharing
• 13:52
  Speaker 6: with Moscow a grim assessment of its odds of victory
• 13:54
  Speaker 6: over Ukraine. How do you interpret that visit and that messaging? General,
• 14:00
  Speaker 6: is this about to be a breaking point for Russia?
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  Speaker 1: Kayla, I sure wish it was.
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  Speaker 3: But I'm very skeptical of all the different reports we
• 14:11
  Speaker 3: got coming out of this visit, before it and after it.
• 14:17
  Speaker 3: It's good that the director of the CIA was meeting
• 14:20
  Speaker 3: with his counterpart. I think these kinds of things at
• 14:24
  Speaker 3: some level are helpful. But the messages were conflicting. I mean,
• 14:29
  Speaker 3: in one, it was one report said that they were
• 14:33
  Speaker 3: telling the Russians, don't you dare attack NATO. And then
• 14:37
  Speaker 3: the other one said, hey, look, you're getting hammered by
• 14:40
  Speaker 3: the Ukrainians. You're so weak, you need to move to
• 14:42
  Speaker 3: the peace table. So those are obviously at odds with
• 14:46
  Speaker 3: each other. My guess is that one of the purposes
• 14:50
  Speaker 3: for this visit would have been more about getting the
• 14:53
  Speaker 3: Russians to stop supporting Iran, but that was not advertised.
• 14:59
  Speaker 3: So I have to say I'm skeptical about what the
• 15:01
  Speaker 3: real purpose is.
• 15:04
  Speaker 8: He led forces in both the Iraq war and the
• 15:06
  Speaker 8: war in Afghanistan, retired General Ben Hodges. Great to see you, sir,
• 15:10
  Speaker 8: and thanks for staying up late for us. To talk
• 15:13
  Speaker 8: here on Bloomberg, I'm Joe Matthew alongside Kaylee Lines in Washington.
• 15:16
  Speaker 8: Thank you for being with us on the Monday edition.
• 15:18
  Speaker 8: We'll assemble our panel next. Rick Davis and Jeannie Shanzano
• 15:21
  Speaker 8: are up. Stay with us on Balance of Power. We'll
• 15:23
  Speaker 8: have much more coming up after this.
• 15:28
  Speaker 5: You're listening to the Bloomberg Balance of Power podcast. Catch
• 15:31
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• 15:38
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• 15:47
  Speaker 6: Stocks down, yields up. Both of those things largely due
• 15:49
  Speaker 6: to the fact that oil prices are up, too, after
• 15:51
  Speaker 6: the first time in a month. brought skirmishes between the
• 15:55
  Speaker 6: US and Iran in the Strait of Hormuz and that
• 15:57
  Speaker 6: flare up in geopolitical tensions, obviously putting upward pressure on
• 16:00
  Speaker 6: oil prices today. Probably not what you want to see
• 16:03
  Speaker 6: if you're a member of the House of Representatives running
• 16:05
  Speaker 6: for reelection and returning to Washington also for the first
• 16:08
  Speaker 6: time in a month today. Yes, Joe, the House is
• 16:10
  Speaker 6: back in session for a week before they go back
• 16:13
  Speaker 6: on break for the Labor Day holiday. But they are
• 16:16
  Speaker 6: trying to get some things done this week, namely pass
• 16:18
  Speaker 6: the continuing resolution that, of course, already passed through the
• 16:21
  Speaker 6: Senate with a massive bipartisan majority to make sure the
• 16:24
  Speaker 6: government is funded beyond the midterms.
• 16:26
  Speaker 10: Yeah.
• 16:26
  Speaker 8: You had one job and that in this case is
• 16:28
  Speaker 8: to keep the government from closing. But when you say
• 16:31
  Speaker 8: a week, I mean, they're gone Thursday, right?
• 16:33
  Speaker 9: Yeah.
• 16:34
  Speaker 1: So it's kind of a three day for legislator terms.
• 16:37
  Speaker 8: Then they go away 10 days for labor day and
• 16:41
  Speaker 8: the Senate doesn't come back till September 14th. So another
• 16:44
  Speaker 8: grueling three day work week, which might be just enough
• 16:47
  Speaker 8: to get this done. Uh, Kaylee, they're already talking about
• 16:50
  Speaker 8: getting home so they can, you know, run for reelection.
• 16:53
  Speaker 8: It's campaign season. Uh, There are still some challenges, however,
• 16:57
  Speaker 8: and maybe the calendar will make this all work. But
• 17:00
  Speaker 8: as we will discuss with our political panel here, it's
• 17:02
  Speaker 8: never as easy as the headline suggests. Bloomberg Politics contributors
• 17:06
  Speaker 8: Rick Davis and Jeanne Shanzano are with us. We put
• 17:08
  Speaker 8: the whole band back together for you on the Monday edition.
• 17:13
  Speaker 8: He is our Republican strategist and partner at Stonecourt Capital.
• 17:16
  Speaker 8: She is our Democratic analyst and democracy visiting fellow at
• 17:19
  Speaker 8: Harvard University.
• 17:20
  Speaker 1: Kennedy School's Ash Center.
• 17:21
  Speaker 8: Rick, not only do some members have an allergy to
• 17:24
  Speaker 8: CRs to begin with, we've got the hemp loophole to
• 17:28
  Speaker 8: worry about, which was jamming things up before lawmakers left.
• 17:32
  Speaker 8: Can they get this done finally?
• 17:34
  Speaker 2: Well, and in addition to the hemp loophole, you've got
• 17:37
  Speaker 2: a few other riders by the Senate.
• 17:40
  Speaker 1: Yeah, they're going to have to.
• 17:41
  Speaker 2: The whole reason they're here is to discharge this so
• 17:44
  Speaker 2: that they can at least breathe Easy between now and
• 17:49
  Speaker 2: Election Day. But at the end of the day, you know,
• 17:52
  Speaker 2: the Republican caucus, they have a hard time getting together
• 17:55
  Speaker 2: to do anything without Donald Trump whipping them up into shape.
• 17:58
  Speaker 1: So we'll see the first shot today.
• 18:00
  Speaker 2: Is going to be whether or not they're able to
• 18:02
  Speaker 2: fast track this bill, which, you know, sidesteps a lot
• 18:06
  Speaker 2: of the procedural motions. that will make it more difficult
• 18:10
  Speaker 2: to get done in four days. So we'll see today
• 18:13
  Speaker 2: whether or not they can get this moving on the easy.
• 18:16
  Speaker 1: Track or the hard way.
• 18:20
  Speaker 6: Well, judging by history, Jeannie, would you be betting on
• 18:23
  Speaker 6: the easy way or the hard way? Because it does
• 18:26
  Speaker 6: feel like this never really goes down easy with.
• 18:28
  Speaker 2: The margin this narrow.
• 18:30
  Speaker 4: I'm going to go with the hard way, Kaylee. I
• 18:34
  Speaker 4: do think it's in everyone's interest to get this done
• 18:37
  Speaker 4: and get back to their districts so that they can
• 18:40
  Speaker 4: run for office, which is their primary concern and focus.
• 18:44
  Speaker 4: So there's nothing like that incentive to get them moving.
• 18:48
  Speaker 4: But I do think it depends on a lot of factors,
• 18:51
  Speaker 4: as we always say, because it's such a narrow majority.
• 18:55
  Speaker 4: You've got a question of how many people are out.
• 18:58
  Speaker 4: It's back to school session for the kids. You may
• 19:00
  Speaker 4: have some parents home. So there's a lot of things
• 19:03
  Speaker 4: that can monkey this up. But if I was to bet,
• 19:06
  Speaker 4: I would say they will kick the can to December successfully.
• 19:10
  Speaker 4: early enough this week so they can get home for
• 19:13
  Speaker 4: the next 10-day recess. All right.
• 19:16
  Speaker 8: Dare to dream. We can do anything in this country. Rick,
• 19:20
  Speaker 8: they're talking about doing this under suspension of the rules.
• 19:25
  Speaker 8: Why do we need to suspend the rules to keep
• 19:27
  Speaker 8: the government open?
• 19:28
  Speaker 2: Because otherwise you have probably a dozen procedural votes that
• 19:32
  Speaker 2: would start today that would just gum up the works. Look,
• 19:37
  Speaker 2: this is a bipartisan bill when it passes Senate. A
• 19:39
  Speaker 2: lot of support for this on both the Democratic and
• 19:42
  Speaker 2: the Republican side. It should not be a political issue
• 19:46
  Speaker 2: when it gets to the House of Representatives. In fact,
• 19:48
  Speaker 2: there will probably be as many problems with the Freedom
• 19:50
  Speaker 2: Caucus with this bill as there is with the Democratic Caucus.
• 19:53
  Speaker 2: And so you'll be able to pick up enough Democratic
• 19:56
  Speaker 2: votes to be able to pass this if it comes
• 19:58
  Speaker 2: down to a vote. But yeah, the whole idea here
• 20:01
  Speaker 2: is to just lower the pain threshold for at least
• 20:03
  Speaker 2: these three days that they're back. They've only got three
• 20:07
  Speaker 2: weeks left in this entire term of Congress before the election.
• 20:12
  Speaker 2: And I think at this stage, especially after five weeks
• 20:15
  Speaker 2: being back home and really hearing a lot from their
• 20:20
  Speaker 2: constituencies about how unhappy they are, the last thing anybody
• 20:23
  Speaker 2: wants right now is right before Labor Day, when everyone's
• 20:28
  Speaker 2: getting their kids back to school, to have a big
• 20:31
  Speaker 2: partisan fight over the budget.
• 20:35
  Speaker 6: Well, as we consider the fact that, as Rick points out,
• 20:37
  Speaker 6: there are only about three legislative weeks between now and
• 20:40
  Speaker 6: the election. I believe after the election, there's only about
• 20:42
  Speaker 6: three legislative weeks before this continuing resolution would expire again.
• 20:48
  Speaker 6: It only goes until December 11th. Jeannie, so even if
• 20:51
  Speaker 6: the House can get this done this week, do you
• 20:53
  Speaker 6: think there could be issue on the horizon of getting
• 20:55
  Speaker 6: another CR pass or full appropriations bills in the lame
• 20:59
  Speaker 6: duck session? Or does the very nature of the lame
• 21:01
  Speaker 6: duck session make that a little bit of an easier ask?
• 21:05
  Speaker 4: I don't think it's ever easy, Kayleigh. I think it's
• 21:08
  Speaker 4: going to be a challenge. I mean, okay, a lot
• 21:10
  Speaker 4: of it depends on what happens in the midterm. You know,
• 21:15
  Speaker 4: do Republicans keep the House? Do Democrats take it? What
• 21:18
  Speaker 4: is the breakdown there? But it is not gonna be
• 21:22
  Speaker 4: easy because, you know, just one example, there are a
• 21:25
  Speaker 4: lot of people, particularly on the Republican side, but also
• 21:29
  Speaker 4: some on the Democratic side. And, you know, I consider
• 21:32
  Speaker 4: myself in this vein I don't love governing by CR.
• 21:37
  Speaker 4: And so, you know, once they get over the hump
• 21:39
  Speaker 4: of this election, we are back to the reality that
• 21:42
  Speaker 4: we are living in a government that simply are a
• 21:45
  Speaker 4: Congress with a Congress that can't pass a budget on
• 21:48
  Speaker 4: time and sort of, you know, moves us from, you know,
• 21:51
  Speaker 4: CR to CR to CR. It's no way to run
• 21:55
  Speaker 4: a household, let alone a government this big, especially with
• 21:59
  Speaker 4: all the economic problems we are facing in a $ 40
• 22:02
  Speaker 4: trillion debt. And so I don't think it's going to
• 22:05
  Speaker 4: be much easier in the lame duck. That's that's my guess,
• 22:10
  Speaker 4: of course, Kayleigh. But it's probably not that much of
• 22:13
  Speaker 4: a stretch because it's never easy in Congress.
• 22:16
  Speaker 1: Well, there may be there may be one other vote.
• 22:20
  Speaker 1: We'll see about this.
• 22:22
  Speaker 8: As Vlad Vlasik arrives in Washington, Ukraine's presidential commissioner for
• 22:27
  Speaker 8: sanctions policy. Rick, this is a near advisor to Vladimir Zelenskyy.
• 22:32
  Speaker 8: and he's going to be sitting down with House Democrats
• 22:34
  Speaker 8: throughout the week to try to make the case for
• 22:36
  Speaker 8: the Russia sanctions bill.
• 22:37
  Speaker 1: Will it work? Yeah, it might work.
• 22:40
  Speaker 2: If they are able to get past the stopgap bill,
• 22:45
  Speaker 2: they would certainly want to bring up the sanctions bill
• 22:49
  Speaker 2: that passed the Senate. I would say the one conflict
• 22:54
  Speaker 2: is that in that bill, it gives the president sweeping
• 22:58
  Speaker 2: tariff authority. Well, the least popular thing right now is
• 23:02
  Speaker 2: probably tariff authority. And so even though everyone wants to
• 23:07
  Speaker 2: pile on and do sanctions, especially secondary sanctions, to try
• 23:13
  Speaker 2: and cap off the Russian war machine, there are a
• 23:18
  Speaker 2: lot of Republicans and Democrats who are a little bit
• 23:21
  Speaker 2: cautious about giving Donald Trump additional important sanctions capability or
• 23:27
  Speaker 2: tariff capability. But that being said, this was a, I think, 85,
• 23:31
  Speaker 2: 86 votes in the Senate out of 100. It should
• 23:35
  Speaker 2: pass before they get out of town. And of course,
• 23:38
  Speaker 2: you know, having Ukraine authorities here to help push it
• 23:41
  Speaker 2: through at least adds a lot of focus to it.
• 23:44
  Speaker 2: I think it could be a good outcome for this
• 23:46
  Speaker 2: next four days.
• 23:49
  Speaker 6: Well, is that potential outcome, Jeannie, the signal at the
• 23:53
  Speaker 6: very least that could be sent to the Kremlin in
• 23:54
  Speaker 6: the form of the president having greater authority to go
• 23:58
  Speaker 6: after those who are supportive of Russia empowering its war machine?
• 24:02
  Speaker 6: Is that worth the greater tariff powers that could come
• 24:05
  Speaker 6: with it? Are Democrats thinking about this calculus the right way?
• 24:10
  Speaker 4: They are really thinking about it. We heard over the
• 24:12
  Speaker 4: weekend several Democrats came out and said they do not
• 24:16
  Speaker 4: support this bill for the very reason that Rick just
• 24:19
  Speaker 4: talked about. And you just mentioned the expansion of presidential
• 24:22
  Speaker 4: powers as it pertains to tariffs. You know, I wonder,
• 24:26
  Speaker 4: would it have been different if this had happened, you know,
• 24:29
  Speaker 4: prior to this? this tariff war with Canada. But even
• 24:34
  Speaker 4: before that, he has been moving so quickly and exerting
• 24:39
  Speaker 4: so much power on tariffs, being pushed back by the
• 24:41
  Speaker 4: Supreme Court. I don't think you're going to get many
• 24:45
  Speaker 4: Democrats prior to the election who are going to go
• 24:48
  Speaker 4: on the record supporting more support, supporting President Trump having
• 24:53
  Speaker 4: a larger tariff power, even though they really do want
• 24:57
  Speaker 4: to rein in Putin. They want to rein in Russia.
• 24:59
  Speaker 4: They want to assist Ukraine. I think for many of them,
• 25:02
  Speaker 4: this is a bridge too far. You know, if it
• 25:04
  Speaker 4: gets to a vote, maybe they squeak it by. But
• 25:07
  Speaker 4: you're going to see a substantial Democratic pushback on this.
• 25:11
  Speaker 4: Because it involves expansion of powers for the president. And
• 25:15
  Speaker 4: that's one thing that's verboten for most Democrats.
• 25:19
  Speaker 1: I'm just surprised.
• 25:20
  Speaker 8: And I know it's only Monday here, guys, but no
• 25:22
  Speaker 8: one has raised their hand to write legislation renaming the
• 25:25
  Speaker 8: Lake of Ontario.
• 25:27
  Speaker 1: That's got to happen this week. Right, Rick?
• 25:31
  Speaker 2: I would say there's a high sensitivity to not creating
• 25:35
  Speaker 2: political issues you have to explain at home right now.
• 25:37
  Speaker 2: A lot of these members are certainly Republicans, very nervous
• 25:43
  Speaker 2: about this talk of blue waves and their future in
• 25:47
  Speaker 2: the body. And I would doubt that anybody's going to
• 25:50
  Speaker 2: want to take a walk down or, I guess, pick
• 25:53
  Speaker 2: up that paddle to rename.
• 25:57
  Speaker 1: The lake.
• 25:58
  Speaker 10: Well done.
• 26:00
  Speaker 3: All right.
• 26:00
  Speaker 6: I have to say I'm fresh back from Canada. I
• 26:02
  Speaker 6: spent the weekend there. Got a lot of eye rolls
• 26:05
  Speaker 6: when I asked Canadians about the lake.
• 26:09
  Speaker 3: Renaming.
• 26:09
  Speaker 6: I'm just going to.
• 26:09
  Speaker 1: Were you treated well? Were they nice? Canada nice is
• 26:12
  Speaker 1: still a thing?
• 26:13
  Speaker 6: Perfectly fine for this American. They do have some pretty
• 26:15
  Speaker 6: strong feelings about the American that occupies the White House,
• 26:17
  Speaker 6: I will say. Rick Davis and Jeanne Shanzano, our political
• 26:21
  Speaker 6: panel today. Thank you very much for joining us. And
• 26:23
  Speaker 6: we're going to continue the conversation we were having with
• 26:25
  Speaker 6: Rick and Jeanne about the business before the House and
• 26:27
  Speaker 6: Republican Congressman Rich McCormick of Georgia joins us shortly.
• 26:31
  Speaker 1: Stay with us on Balance of Power. We'll have much
• 26:33
  Speaker 1: more coming up after this.
• 26:38
  Speaker 5: You're listening to the Bloomberg Balance of Power podcast. Catch
• 26:42
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• 26:45
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• 26:49
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• 26:52
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• 26:55
  Speaker 8: We're live in Washington, though, talking politics, and you can't
• 26:58
  Speaker 8: remove politics from the bond market today. Kayleigh, we're at
• 27:02
  Speaker 8: 525 on a 30-year, 525. Remember the freakout, the market
• 27:06
  Speaker 8: freakout when it hit 522 a little more than a
• 27:10
  Speaker 8: week ago, and that was when we were talking about
• 27:12
  Speaker 8: economic D-Day and a number of things and a sort
• 27:14
  Speaker 8: of awakening in the bond market that we had a
• 27:16
  Speaker 8: $ 40 trillion federal debt. It really hasn't relaxed since then.
• 27:21
  Speaker 8: You could argue that The stock market's holding up pretty
• 27:24
  Speaker 8: well considering the competition.
• 27:26
  Speaker 6: Yeah, and it's one thing to look at the 30-year.
• 27:27
  Speaker 6: Look at the 10-year, 475, as Charlie just told us.
• 27:30
  Speaker 6: That is the highest rate on the 10-year yield going
• 27:32
  Speaker 6: back to January 14, 2025. President Trump hadn't even taken
• 27:37
  Speaker 6: the oath of office yet for the second go-around. These
• 27:40
  Speaker 6: are the highest borrowing costs we have seen throughout the
• 27:43
  Speaker 6: course of his presidency. In the case of the long end,
• 27:45
  Speaker 6: of course, around the highest we've seen. in decades. Is
• 27:48
  Speaker 6: the only thing that can stop us from going higher
• 27:50
  Speaker 6: actually potentially a higher Fed funds rate to show the
• 27:52
  Speaker 6: Fed is serious about inflation? Let's pose that question now
• 27:55
  Speaker 6: to Ira Jersey, the chief U.S. rate strategist for Bloomberg Intelligence,
• 27:58
  Speaker 6: who is live with us from Princeton, New Jersey. Ira, obviously,
• 28:02
  Speaker 6: we're fresh off Jackson Hole, where Kevin Walsh talked a
• 28:04
  Speaker 6: pretty big game about 2% being the target, and he's
• 28:07
  Speaker 6: serious about getting to it. If the Fed were to
• 28:11
  Speaker 6: decide to in September, along the lines of what Rorsch
• 28:16
  Speaker 6: said about having work to do on inflation, could that
• 28:19
  Speaker 6: actually arrest the upward pressure we are seeing on rates
• 28:22
  Speaker 6: right now?
• 28:23
  Speaker 11: I think it can, particularly if it comes with a
• 28:25
  Speaker 11: serious commitment to do whatever it takes to get inflation
• 28:28
  Speaker 11: back down to 2 percent, which would mean not only
• 28:30
  Speaker 11: the two-ish hikes that are currently priced, but also potentially
• 28:33
  Speaker 11: a third or a fourth hike. And I think that
• 28:35
  Speaker 11: that's the type of commitment that would need to be
• 28:37
  Speaker 11: done in order for Firstly, the Fed to maintain its credibility,
• 28:41
  Speaker 11: because I think right now they are at risk of
• 28:43
  Speaker 11: losing inflation-fighting credibility if they don't deliver on the hawkish
• 28:48
  Speaker 11: comments that he's made. And I do suspect that in
• 28:50
  Speaker 11: that situation, the market will price for somewhat slower economic
• 28:54
  Speaker 11: activity going forward, and that would mean slightly lower yields
• 28:57
  Speaker 11: of 10-year and 30-year debt.
• 29:00
  Speaker 8: We're hearing from a lot of analysts that 5%, just
• 29:04
  Speaker 8: a matter of when, for the 10-year IRA, what does
• 29:08
  Speaker 8: that tell us? about the state of this market and
• 29:10
  Speaker 8: the technical factors that are pushing things higher.
• 29:13
  Speaker 11: Well, so keep in mind, the U.S. sell-off in the
• 29:18
  Speaker 11: rates market is not happening in a vacuum. It is
• 29:21
  Speaker 11: a global phenomenon where you have rates in Japan and
• 29:24
  Speaker 11: Europe and England all going up significantly over the past
• 29:28
  Speaker 11: couple of months. And as part of that, the U.S.
• 29:31
  Speaker 11: Treasury is going to have to compete with those to
• 29:34
  Speaker 11: attract more investors.
• 29:36
  Speaker 1: 5% isn't the end of the world.
• 29:38
  Speaker 11: We were at 5% this cycle, this economic cycle, and
• 29:43
  Speaker 11: it didn't destroy the economy.
• 29:45
  Speaker 9: By any sense of the imagination.
• 29:47
  Speaker 11: Now, if we go significantly higher than that, then that
• 29:50
  Speaker 11: means you probably have mortgage rates pushing 8%, and that
• 29:54
  Speaker 11: winds up probably slowing the economy much more significantly. But
• 29:59
  Speaker 11: if we stay here, 475 to 5%, I don't think
• 30:01
  Speaker 11: that's the end of the world. I actually do suspect
• 30:05
  Speaker 11: that yields are going to be making a new kind
• 30:08
  Speaker 11: of near-term high, and we wind up probably with rates rallying,
• 30:12
  Speaker 11: yields going down somewhat over the next two or three months.
• 30:18
  Speaker 6: Well, okay, so two or three months, Ira, basically brings
• 30:21
  Speaker 6: us right around midterm election time, depending on where in
• 30:24
  Speaker 6: that two- to three-month time horizon we ultimately fall. When
• 30:28
  Speaker 6: we consider how the fiscal situation is factoring into what
• 30:32
  Speaker 6: we're seeing in bond markets, is there a signal that
• 30:34
  Speaker 6: Congress would be able to send around being serious about
• 30:38
  Speaker 6: what the Treasury Secretary described recently as fiscal consolidation that
• 30:41
  Speaker 6: might help move things along, or do you actually have
• 30:43
  Speaker 6: to see it in practice?
• 30:45
  Speaker 1: Well, I think we have to see it in practice, right?
• 30:47
  Speaker 11: The markets know that Congress, generally speaking, particularly when a
• 30:51
  Speaker 11: single party is in power of both houses of Congress
• 30:54
  Speaker 11: and the presidency, there is no fiscal restraint. The Republicans
• 30:58
  Speaker 11: tend to cut taxes, raising the deficit, and Democrats spend
• 31:01
  Speaker 11: more money raising the deficit, right? So really, the best
• 31:04
  Speaker 11: time that you've seen, and most of the time that
• 31:06
  Speaker 11: you've seen significant deficit reduction has actually been when you've
• 31:10
  Speaker 11: had split government. So maybe if there is a split government,
• 31:14
  Speaker 11: the market will be a little bit placated by the
• 31:17
  Speaker 11: idea that you're not going to get more fiscal spending
• 31:19
  Speaker 11: and just the larger and larger deficits going forward. Keep
• 31:23
  Speaker 11: in mind, a lot of people have been asking me,
• 31:25
  Speaker 11: what can work? How can the government actually reduce the deficit? Well,
• 31:29
  Speaker 11: the only thing that's really worked in the last 20
• 31:31
  Speaker 11: years to get the deficit lower was sequestration.
• 31:35
  Speaker 1: So if we go back.
• 31:36
  Speaker 11: To what happened 15 years ago and they do sequestration again,
• 31:40
  Speaker 11: that forces the fiscal growth, basically spending growth, to be
• 31:44
  Speaker 11: at a level that can be maintained with a decent
• 31:48
  Speaker 11: economy producing more taxes and thereby lowering the deficit. And
• 31:53
  Speaker 11: then debt to GDP can actually go down. And what
• 31:57
  Speaker 11: are the.
• 31:57
  Speaker 1: Chances of that? Near zero, probably.
• 32:00
  Speaker 8: Reminding us of the sequester just as lawmakers return to town, Ira.
• 32:04
  Speaker 8: It's great to have you with us on Balance of Power.
• 32:06
  Speaker 8: Ira Jersey from Bloomberg Intelligence Headquarters in New Jersey. And
• 32:11
  Speaker 8: a pleasure to speak with a lawmaker getting back to
• 32:13
  Speaker 8: Washington right now. And Rich McCormick, Republican congressman from Georgia's
• 32:18
  Speaker 8: 7th District, a retired U.S. Navy and Marine Corps commander
• 32:21
  Speaker 8: and a member of of the House Armed Services Committee.
• 32:24
  Speaker 8: So we've got a lot of questions regarding geopolitics and,
• 32:27
  Speaker 8: of course, domestic issues. Congressman McCormick, it's great to have
• 32:31
  Speaker 8: you here on Bloomberg TV and radio. You know, there's
• 32:33
  Speaker 8: a saying on Wall Street, and we were just talking
• 32:35
  Speaker 8: to Ira as I believe you were listening, about the
• 32:37
  Speaker 8: market's view of politics here in Washington.
• 32:39
  Speaker 1: You know the old line, gridlock is good.
• 32:42
  Speaker 8: You can't blame investors sometimes for feeling that way when
• 32:46
  Speaker 8: they're saying, you know what, just close the store. We
• 32:48
  Speaker 8: can't take any more deficit spending. What's your reaction?
• 32:52
  Speaker 9: Yeah, well, remember that Congress was designed on purpose to
• 32:57
  Speaker 9: be ineffective and inefficient. It was never supposed to be
• 33:00
  Speaker 9: more powerful than the people themselves. And people who get
• 33:03
  Speaker 9: frustrated with how slow we change forget that that's the
• 33:06
  Speaker 9: way it was designed. As a matter of fact, I
• 33:08
  Speaker 9: would say that the president's power is far too often
• 33:11
  Speaker 9: more powerful than the legislative branch, which it's not supposed
• 33:13
  Speaker 9: to be. And it doesn't matter if it's Democrat or Republican.
• 33:17
  Speaker 9: Quite frankly, the one thing where I think we've got
• 33:19
  Speaker 9: it wrong is we require a filibuster-proof Senate in order
• 33:22
  Speaker 9: to pass a budget. That always is against our interests,
• 33:26
  Speaker 9: whether it's Republican or Democrat. Let me explain why. It's
• 33:28
  Speaker 9: the only thing we're constitutionally required to do every year.
• 33:31
  Speaker 9: We're not required to pass laws, but we have to
• 33:33
  Speaker 9: pass a budget. Anytime you need a filibuster, that means
• 33:36
  Speaker 9: that there are several senators that will hold out because
• 33:38
  Speaker 9: you need 60 votes to get more pork added. That
• 33:41
  Speaker 9: doesn't matter if we're doing a Democrat or Republican budget.
• 33:44
  Speaker 9: It's always more pork. So we always end up with
• 33:47
  Speaker 9: more deficit spending. I would love to see the budget
• 33:50
  Speaker 9: pass on straight lines. I think it would be the
• 33:52
  Speaker 9: one exception that most people would agree would be good
• 33:54
  Speaker 9: for America. But we haven't done that yet. And unfortunately,
• 33:58
  Speaker 9: it's to our demise when it comes to our economy
• 34:00
  Speaker 9: and our currency.
• 34:02
  Speaker 6: Well, there were more than 60 votes in the Senate
• 34:04
  Speaker 6: for the continuing resolution they passed before leaving town. Ninety
• 34:07
  Speaker 6: to six was the final vote on that funding bill
• 34:10
  Speaker 6: that will keep the status quo until December 11th. Congressman,
• 34:13
  Speaker 6: are you intending to vote for that on the House
• 34:15
  Speaker 6: floor this week? And is that the only thing you
• 34:17
  Speaker 6: and your colleagues might be able to get done prior
• 34:19
  Speaker 6: to the Labor Day recess?
• 34:21
  Speaker 9: I think it's a good way to go. I don't
• 34:22
  Speaker 9: think we're going to get another crack at this. And
• 34:25
  Speaker 9: I think a continuing resolution keeps us from shutting down
• 34:28
  Speaker 9: the government. We've had two of the longest shutdowns in
• 34:31
  Speaker 9: American history because people like to debate politics. That's not
• 34:34
  Speaker 9: good for America. It's not good for the veterans. It's
• 34:36
  Speaker 9: not good for the people who work for the government.
• 34:38
  Speaker 9: It's certainly not good for America. And I hate to
• 34:40
  Speaker 9: see this continue during an election year when we should
• 34:43
  Speaker 9: be focused on other things. At least it's a continuing
• 34:45
  Speaker 9: resolution of what we've passed rather than Nancy Pelosi, which
• 34:49
  Speaker 9: is what we faced last time. So I think it'll
• 34:50
  Speaker 9: be a better, more conservative, still not perfect, but better bill.
• 34:56
  Speaker 8: Saw you on the Bloomberg weekend show talking about data center, Congressman.
• 34:59
  Speaker 8: And I want to ask you about this. It's become
• 35:01
  Speaker 8: such an important issue for so many of our conversations,
• 35:04
  Speaker 8: even when we least expect it. And there is now
• 35:06
  Speaker 8: going to be apparently a reply from industry here. Build
• 35:09
  Speaker 8: American AI, a new advocacy group tied to pro-AI super
• 35:14
  Speaker 8: PAC leading the future.
• 35:16
  Speaker 1: Has $ 50.
• 35:17
  Speaker 8: Million cash on hand and is going to be putting
• 35:19
  Speaker 8: it to work, we're reading, in Kansas, Ohio, and Wisconsin.
• 35:23
  Speaker 8: I'm wondering what you think is the best way to
• 35:26
  Speaker 8: use that money. This has become a Democrat and Republican
• 35:30
  Speaker 8: point of controversy here. Is this about public education right
• 35:34
  Speaker 8: now or going after the candidate who does not want
• 35:37
  Speaker 8: a data center?
• 35:38
  Speaker 9: 100% education. To me, I don't think it should be controversial.
• 35:42
  Speaker 9: People don't realize that you have 635 data centers in
• 35:44
  Speaker 9: Virginia alone. We have more data centers than we have
• 35:49
  Speaker 9: counties in Georgia, and we have 159 counties, I believe,
• 35:53
  Speaker 9: and I think we have 235 data centers. One of
• 35:56
  Speaker 9: the oldest ones in my district, you don't even know.
• 35:58
  Speaker 9: You walk by it, you don't hear it, you don't
• 36:00
  Speaker 9: see it.
• 36:01
  Speaker 1: It's not warm.
• 36:01
  Speaker 9: It's not consuming. It's more than its share of energy.
• 36:05
  Speaker 9: There's so much misinformation out there, and quite frankly, If
• 36:09
  Speaker 9: I was somebody from a community, I'd want a data
• 36:11
  Speaker 9: center in my community.
• 36:12
  Speaker 7: Why?
• 36:12
  Speaker 1: Because it's going to pay my taxes.
• 36:14
  Speaker 9: We have places in South Georgia where the data centers
• 36:16
  Speaker 9: are literally paying for your property taxes.
• 36:18
  Speaker 1: Wouldn't that be nice?
• 36:19
  Speaker 9: Thousands of dollars of property tax, you don't have to pay.
• 36:22
  Speaker 9: And your community is going to be better. Better schools,
• 36:24
  Speaker 9: better roads. The energy cost is not going to go up.
• 36:27
  Speaker 9: That's by law in Georgia. Your water supply is not
• 36:30
  Speaker 9: going to be contaminated. It's not going to be consumed
• 36:32
  Speaker 9: because it's a closed system.
• 36:34
  Speaker 1: It's quiet. It's efficient.
• 36:36
  Speaker 9: In fact, we have a surplus of energy in Georgia
• 36:38
  Speaker 9: because we're the only state to build nuclear power plants.
• 36:41
  Speaker 9: But even if we didn't, these fuel cells that go
• 36:43
  Speaker 9: with these energy, with these data centers are going to
• 36:46
  Speaker 9: be actually a net positive, not a net negative. And
• 36:49
  Speaker 9: I think every community should be clamoring for them except
• 36:52
  Speaker 9: for the misinformation. And that's what we need to correct.
• 36:56
  Speaker 6: Well, so when we consider who might be falling victim
• 36:59
  Speaker 6: to that misinformation, there are Republican candidates, congressmen, who are
• 37:04
  Speaker 6: also suggesting that data centers need to be reined in,
• 37:06
  Speaker 6: not unleashed. You could look at Governor Greg Abbott in Texas,
• 37:10
  Speaker 6: who has obviously put a pause on things until an
• 37:12
  Speaker 6: audit is taking place. Mike Rogers, who's running for Senate
• 37:15
  Speaker 6: in Michigan, has joined the more data center reluctant train
• 37:20
  Speaker 6: as of later. Are those candidates wrong to take that position?
• 37:24
  Speaker 9: I think they're being politically careful, and I know it
• 37:26
  Speaker 9: is a hot potato, but I'm one of those people
• 37:28
  Speaker 9: that leans forward. I lean into this because I think
• 37:31
  Speaker 9: that if you don't want a data center, that's your choice.
• 37:33
  Speaker 9: Your community gets to decide this. Why do you have
• 37:34
  Speaker 9: county commissioners and local state leaders in those communities deciding
• 37:39
  Speaker 9: those laws? But I tell you what, I'll take them
• 37:42
  Speaker 9: on the bases, the military bases. We have Fort Gordon,
• 37:44
  Speaker 9: which is the headquarters for Cypress Command. I would love
• 37:47
  Speaker 9: to see a data center put there. It's built in security.
• 37:49
  Speaker 9: You'd have a net positive influence on the base. You
• 37:51
  Speaker 9: could actually lease data. The land to the military would
• 37:54
  Speaker 9: actually help pay for the base. I'm all for it
• 37:57
  Speaker 9: because I think it benefits my community. If you don't
• 37:59
  Speaker 9: want one, that's fine, but careful what you wish for.
• 38:02
  Speaker 9: You're not going to get the benefit. And I think
• 38:03
  Speaker 9: the benefits far, far exceed any of the detriments. But
• 38:07
  Speaker 9: people are scared of what they don't know about. And
• 38:08
  Speaker 9: that comes the educational piece, which I think should be
• 38:11
  Speaker 9: the focus of most politicians.
• 38:13
  Speaker 1: Not the fear of it.
• 38:14
  Speaker 9: Not playing into the populism of it, but actually educating
• 38:17
  Speaker 9: people on why it's going to benefit them and their communities.
• 38:21
  Speaker 8: Well, I'm fascinated by this, Congressman, because it seems to
• 38:24
  Speaker 8: not matter the political stripes. As soon as Kayleigh or
• 38:27
  Speaker 8: I say the word data center, somebody's got a three-minute
• 38:30
  Speaker 8: elevator pitch on why they are evil. So we're noting
• 38:34
  Speaker 8: your position here. We've only got a couple of minutes left,
• 38:37
  Speaker 8: closer to one. And I want to ask you, as
• 38:39
  Speaker 8: a combat veteran and a member of armed services, what
• 38:41
  Speaker 8: your thought is on this most recent action with Iran?
• 38:44
  Speaker 1: We're shooting at each other again, Congressman. Will there be
• 38:47
  Speaker 1: more of this?
• 38:48
  Speaker 9: Well, as long as they keep on trying to lay
• 38:50
  Speaker 9: mines and try to control the straits or moves, which
• 38:53
  Speaker 9: are international waters, not theirs like they claim, as long
• 38:55
  Speaker 9: as they continue to be defiant and threatening, there's going
• 38:58
  Speaker 9: to be a problem. And they've done nothing but show
• 39:00
  Speaker 9: defiance for us. I'm one of those guys. I taught
• 39:03
  Speaker 9: evolution warfare for many years. I've been in the military
• 39:06
  Speaker 9: for 20 years. I spent a lot of time in
• 39:07
  Speaker 9: that area. They don't understand anything other than strength. They
• 39:10
  Speaker 9: are an evil regime that's caused nothing but problems for
• 39:12
  Speaker 9: the rest of the world, especially the Middle East, and
• 39:14
  Speaker 9: they need to be done away with. Unfortunately, that's a
• 39:16
  Speaker 9: complex issue to deal with.
• 39:20
  Speaker 6: Just quickly, we have 30 seconds left, Congressman. Should the U.S.
• 39:23
  Speaker 6: then take more forceful kinetic action to eliminate any remaining
• 39:27
  Speaker 6: capability Iran may have to lay mines?
• 39:30
  Speaker 9: Well, certainly any time that they posture or they start
• 39:32
  Speaker 9: to threaten the shipping lanes, absolutely. I wish they'd be
• 39:36
  Speaker 9: done away with it. They're going to try to play
• 39:37
  Speaker 9: into this political sphere of midterms. I'm sure they're going
• 39:40
  Speaker 9: to try to be disruptors. So that's going to cause
• 39:42
  Speaker 9: some problems. But I think we just have to keep
• 39:44
  Speaker 9: those shipping lanes open so we can continue to reduce
• 39:47
  Speaker 9: the oil price around the world, especially in the United States.
• 39:51
  Speaker 6: All right, Congressman, thanks for joining us. Rich McCormick, the
• 39:53
  Speaker 6: Republican representing Georgia's 7th District, here with us on Balance
• 39:57
  Speaker 6: of Power.
• 40:00
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• 40:04
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• 40:06
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• 40:09
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• 40:12
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